Crude oil inventories last week shed 900,000 barrels, the Energy Information Administration reported, adding inventories were at 6 percent over the five-year average for this time of the year.
The report comes a day after the American Petroleum Institute reported an estimated build of 3.9 million barrels in crude oil and compared with a more moderate build of 1.9 million bpd that the EIA reported for the previous week.
Analysts had expected an even more modest inventory build for last week, at 400,000 barrels.
In gasoline, the authority reported a 1.7-million-barrel decline in inventories for the week to March 26. This compared with a small build of 200,000 barrels for the previous week.
Gasoline production rose on the week, to 9.3 million bpd, compared with 8.6 million bpd a week earlier.
In middle distillates, the EIA estimated an inventory build of 2.5 million barrels for last week, which compared with a build of 3.8 million barrels for the previous week.
Distillate production averaged 4.7 million bpd last week, compared with 4.6 million bpd for the previous week.
Oil prices are above $60 ahead of the April OPEC+ meetings, to take place tomorrow and on Friday. The market has more or less priced in an expected agreement to roll over current production cuts into May and June, even if Russia gets the small increase in production it asked for in response to higher seasonal demand at home.
The global demand picture, however, remains mixed. Covid-19 cases are on the rise in much of the United States and Europe, casting a shadow over earlier expectations that as vaccinations gathered speed cases will begin to fall steadily.
This has injected additional uncertainty in an already uncertain market, enhancing the volatility of oil prices.
At the time of writing, Brent crude was trading at $63.82 a barrel, with West Texas Intermediate at $60.66 a barrel.
By Irina Slav for Oilprice.com
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What does that mean? It means plainly that the global oil market and prices ignore announcements by both the EIA and API about a build or a draw in American oil inventories.
What matters is the global oil inventories and these have been depleting fast since the fourth quarter of 2020.
The reason the impressive surge in oil prices since December last year slowed down is because of concerns over major European economies bringing back lockdowns.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London